Even as Abu Dhabis Etihad Airways waits for government and regulatory approvals to purchase 24% in Naresh Goyal-promoted Jet Airways,the two airlines have begun work on cementing the alliance and accruing value from it. The two airlines are working towards offering a standard interior product for their long-haul flights. The process of standardising the interiors for long-haul operations is likely to begin with the Boeing 787s,which Jet Airways will start getting from next year. As part of the plan,Jet’s 787 Dreamliners will have interiors fitted by B/E Aerospace,which is supplying the same interiors to Etihad’s incoming fleet of 787s and its European partner airberlin.
Further collaboration will include sharing the 787 simulator in Abu Dhabi and sharing maintenance facilities over there, said a person in the know. These facilities will be in addition to the network and planning office that Jet plans to have in Abu Dhabi. Sharing the simulator for the Boeing 787 in Abu Dhabi would mean that Jet Airways would need to send its pilots to the UAE for training to fly the Dreamliners. James Hogan,chief executive officer of Etihad Airways,had said at the IATA annual general meeting earlier this month that Etihad along with partners airberlin and Jet Airways will sign deals for common interiors,in-flight entertainment systems,engines and maintenance.
Jet Airways did not comment on the story.
Joint deals on interiors will give airberlin and Jet access to economies of scale they would not otherwise have on the 787 interiors,thereby reducing costs, said aviation consultancy firm Centre for Asia-Pacific Aviation in a recent report on the possible synergies between Etihad’s partners. airberlin and Jet have only 15 and 10 787s on order whereas Etihad has an order for 41 and all deliveries start late 2014. The report added that in addition to lower costs for the three carriers,the deal would give the airlines a common on-board product for their flagship 787 fleets. Having Etihad,Jet and airberlin offer a standard long-haul interior product is also important from a passenger experience perspective given the extensive codesharing between the carriers and the fact that airberlin and Jet operate alongside Etihad in Abu Dhabi, the CAPA report said.
Jet Airways which was reportedly set to order 50 Boeing 737s during the Paris Air Show,did not place any such order. Sources in the know said the airline might be waiting to place a joint aircraft order along with Etihad and airberlin. Hogan had also said at the IATA annual general meeting that Etihad is in early days of discussing a potential joint aircraft order. Etihad,Jet Airways and airberlin are relatively big and of similar size,but all three have local rivals that are slightly larger in terms of fleet size and operations. Combined,the trio has a fleet of 276 aircraft with another 192 on order. While Etihad has agreed to buy a 24% stake in Jet Airways,it already owns 29.21% in airberlin.
Etihad and Jet Airways’ investment application to the foreign investment promotion board (FIPB),reviewed by FE,reveals that the two airlines had indicated possible synergies in fleet acquisition,maintenance and long-haul flight products. Offering a common ground experience will likely enhance the credibility of any alliance on a regional level and present opportunities to leverage efficiencies from ground handlers and any existing operational staff, the FIPB application from the two airlines stated.
Jet Airways has also stated that it wants to use Abu Dhabi as a hub for its international traffic flying west of India. “Out of the total international traffic of 40 million,28 million are flying to and from the West, said Raj Sivakumar,senior vice-president alliances and planning,Jet Airways,during the airline’s Q4 analyst call. Abu Dhabi will be a key focal point in catering to this traffic flying to and from the west of India. Sivakumar added that the airline also plans on connecting Abu Dhabi to various destinations in India,including having direct flights between Tier II cities and the capital of the UAE using narrow-bodied Boeing 737s. On Friday,Jet’s shares closed 2.83% higher on the Bombay Stock Exchange at Rs 449.45.